Digital TV in Ireland

The BCI announced recently that it has awarded three multiplexes for Digital Terrestrial Television (DTT) to Boxer. I’m quite excited because I am very interested in the technology, my master’s thesis was on video compression algorithms, and I think more competition in the market would be good. I have a number of reservations however.

DTT is not really about giving viewers more choice. Most Irish households who want multi-channel viewing are served by either cable or satellite. TV ownership has reached saturation point. Most people who want a TV set own one. The promise of High Definition TV and discs (Blu-ray) is a great way to increase demand for new TVs. Like the transition from Vinyl to CDs, and from VHS to DVD and now Blu-ray; capitalism’s greatest achievement is its ability to persuade people to buy something that they’ve already got.

Digital TV and High Definition TV are not the same thing. High Definition Digital TV has far superior picture quality to what viewers are used to. But not all digital TV is HDTV. Common or garden digital TV is not better than what viewers have now and for some viewers it may be worse.

Many households in the Republic of Ireland can receive analog signals from Northern Ireland or from Wales for free. The transition to digital and the subsequent analog switch-off will mean that these households will soon have to pay for what they now get for free.

Digital signals may not travel as far and as easily as analog signals. Digital TV signals do not degrade gracefully. So homes with poor but acceptable analog signals might not receive a watchable digital signal. So it is not a simple matter of upgrading every transmission site in the state. It is likely that some new transmission sites will be required.

An important motivation for making the transition from analog TV to digital has nothing at all to do with providing consumers with more choice. Analog TV is very inefficient and uses many more radio frequencies (spectrum) to send TV signals that would be required by digital TV. The amount of available radio spectrum is quite limited. Switching off analog TV signals will free up spectrum for other uses. In most markets in the developed world this spectrum is very valuable. Mobile phone companies and other telecommunications businesses are prepared to pay dearly for this spectrum and this has helped top up the public purse in many countries.
Ireland is different however. Successive Irish governments have failed to extract any real value from radio spectrum, preferring the beauty pageant approach to the auctions common in many states. This may be sensible however, since the terrain and human geography of Ireland can make universal service difficult. Simply selling spectrum to the highest bidder would leave the winners largely free to do as they wish and would likely result in a plethora of innovative services available to residents of the larger cities, and nothing elsewhere. At least beauty pageant contestants can trade off universal coverage commitments against high license fees. But even then it can be difficult to make money in geographies such as Ireland's. One winner of a 3G mobile phone license gave it back because it couldn’t figure out how to make money.
So it seems that spectrum in the Republic of Ireland is not very valuable. But if there is little money to be made for the state and little benefit to consumers then why should Ireland bother at all?

The EU has decided that all member states must switch off their analog TV signals by 2012. It makes sense that the EU should get involved. The value that could be generated from selling spectrum in the Netherlands and Germany, for example, would be small if Belgium continued to pollute the airwaves with analog TV signals. So it is clearly an all or nothing proposition. However the geography of some parts of the EU limits the damage they could cause. Analog TV could continue to be used in most of Ireland without causing interference elsewhere. The same could be said of other regions at the edge of the EU, northern Scandinavia, for example.

While the EU specified an analog shut off date it did not mandate any particular technology nor did it insist on any encryption standards or rules. This was a mistake I believe. The US, Europe, and Japan/Korea all have large audio visual technology industries. They also have large industries based on software and other technologies. These industries could become world beaters if the right conditions were in place and give European tech firms a huge lead. Much of the technology of digital TV was developed in Europe. But now Europe risks falling behind. The standardization of the US market will allow for innovative products and services to be rolled out across the entire continent. This economy of scale and access to a large market will allow innovators to take more risks. In Europe the technologies used will vary from country to country. It is possible that the UK and Ireland will have different standards. This is a huge step backwards. A product or service developed for the UK market might need to be redesigned to work with Irish or French systems. This is a lost opportunity to create a single large market for products an services. The importance of standardization is best illustrated by the example of mobile phone technology. Because Europe settled early on the GSM standard it was able to make huge advances. The US, on the other hand, allowed a free-for-all with various phone networks opting for different technologies and standards. This standardization ensured that for almost a decade mobile telephony was the one area of technology where Europe kicked US butt.

Irish viewers will be able to watch the four stations that are currently free to air (FTA), on the multiplex awarded to BCI to the national broadcaster (RTE). However it is not clear how FTA will work in regions that have traditionally had signal spill-over. So viewers in Aachen, for example, who have long enjoyed free to air TV from the Netherlands might find technological locks in place to prevent them watching Dutch TV even if they have a strong signal and compatible systems. The EU could have required that all FTA transmissions be unencrypted, for example.

I have concerns about who will pay for the infrastructure that needs to be put in place for digital TV. The company awarded the three available multiplexes will not be erecting any transmission facilities. The actual transmission of the signals will be handled by RTE, the national broadcaster. I am concerned that the use of this public resource by a private enterprise will not be on a commercial basis and that the taxpayer will end up subsidizing the private sector. When a second mobile telephone license was awarded to ESAT Digifone some years ago the company circumvented the many planning problems it was facing when erecting transmission towers, by using transmission towers in Garda stations since the police service was exempt from planning regulations. This eventually made Denis O’Brien a very wealthy man and he is one of the main investors in the consortium awarded the multiplexes by BCI. It is interesting, that once again a license to use a resource of the state (spectrum) has been awarded to one enterprise, on the cheap, and that state owned transmission capability is to be used by this enterprise in pursuit if its commercial goals. In many countries there is much discussion about privatizing the public sector. In Ireland we need to start by privatizing the private sector!


ColinM said…
Update: Ireland will use MPEG4. The UK is using MPEG2.

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